Dinah McNav, the ERP Agony Aunt, answers the problems and pressures faced by businesses everywhere. This letter comes from someone in wholesale and distribution who can’t wait to hear the pitter-patter of data collection in their business. But not everyone is ready for the changes that it will bring.
The clock is ticking and I really want to have an ERP system but my partner isn’t ready for that commitment. How do I convince him before it’s too late?
We run a small wholesale and distribution business that has managed to cope with a basic accounting system and spreadsheets for about 5 years but our business relationships have developed and we are starting to get new, bigger contracts. I am concerned that the systems and processes we have in place will not be able to support our growth. However, when I’ve approached the subject with my partner about wanting an ERP he asks, ‘What’s the rush?’ and tries to avoid the subject. It always ends with us arguing, which is starting to effect the business.
I have done some reading about ERP and understand the sort of commitment required but I don’t know much about what it can offer. I need as much information as possible so that I can convince my partner that this will be good for both of us.
Can you help?
Regards, Ms O’Verdue
Dear Ms O’Verdue
I feel your pain. You’d be surprised just how many business relationships start well but, after time, when you need to replace or improve your ERP system, the fear of commitment will kick in.
If you’re not ready to commit to ERP you’ll always run the risk of your competitors taking the advantage, improving the efficiency of their processes and winning more business from you. This will obviously impact on the bottom line of the business and, ultimately, increase the risk of closure. Now I am not saying that this will happen to your business if you don’t upgrade, but you need to at least present a defined business case to your partner outlining the business challenges, the shortfalls in your existing processes, the costs of upgrading and the risks to the business if you don’t. If you have considered these issues then your next step is understanding what advantages there are to ERP within your industry.
ERP can offer you complete control of your business, addressing things like performance levels, productivity and profits, allowing you to streamline operations and improve customer service.
Being a wholesale distributor you need to be able to manage inventory, stock and warehouse planning, supply chain and EDI, customer and supplier demands. If you are using an old IT solution then your business could be open to a number of risks; the potential loss of information, a lack of visibility and an inability to handle growth.
ERP will allow you to manage all your processes from order entry right the way through to invoicing the customer, ensuring that you are a stronger link in the supply chain.
Your partner’s reluctance could be due to the financial implications or the perceived disruption to the daily running of the business. However, the benefits that ERP can offer you could ease some of these pressures, including:
When you are BOTH ready then I would suggest you take a look at Microsoft Dynamics NAV for wholesale / distribution as it is able to provide you with comprehensive, up-to-date financial information, as well as complete supply chain management.
Hopefully this has been enough information to set your partner’s mind at ease and accept that it’s time to take that next step.
Don’t forget to send me photos of your new arrival.
Dinah McNav, ERP Agony Aunt
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Wholesale / Distribution
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